Repositioning products or services is a strategic marketing approach that allows businesses to adapt to changing market conditions and meet the evolving needs of consumers. It involves altering the perception of an offering in the market to gain a competitive edge or target new segments. Marketers opt for repositioning when faced with changing competition, market trends, or internal factors. By repositioning their offerings, businesses can enhance demand, capture untapped market segments, and maintain a strong market presence.
Key Takeaways:
- Repositioning products or services is a strategic marketing strategy to stay competitive and meet consumer demands.
- Marketers reposition their offerings in response to changes in competition, market trends, and internal factors.
- Repositioning can help businesses improve demand, capture new market segments, and maintain a competitive advantage.
- Successful repositioning requires thorough market analysis, careful planning, and effective execution.
- Continuous monitoring and evaluation of the repositioned offering is crucial for long-term success.
The Repositioning Process
Repositioning a product or service is a strategic undertaking that involves evaluating its current market position and making adjustments to improve competitiveness. Although similar to the initial positioning process, repositioning starts from a different standpoint, aiming to alter market perceptions and strengthen the product’s position.
Market analysis is a crucial component of the repositioning process. Marketers utilize various techniques to identify market trends, consumer preferences, and competitors’ strategies. By conducting a comprehensive market analysis, companies can gain valuable insights that inform their repositioning strategies and help them discover new opportunities.
Furthermore, product positioning techniques play a central role in the repositioning process. It involves shaping consumers’ perception of the product or service in relation to its competitors. Effective positioning establishes a unique and compelling competitive advantage that differentiates the offering from others in the market.
During repositioning, marketers may consider making changes to different aspects of the product, including its physical attributes, pricing, or promotional messaging. However, it is common for successful repositioning efforts to focus on altering market perceptions without significant modifications to the product itself.
Monitoring and analyzing the position of the offering over time are crucial to evaluate the effectiveness of the repositioning efforts. This allows marketers to measure the impact of their strategies, make necessary adjustments, and ensure that the repositioning process aligns with the overall marketing objectives.
Benefits of Successful Repositioning
Repositioning a product or service effectively can yield several benefits for businesses, including:
- Enhanced Competitive Advantage: Successful repositioning allows companies to strategically position themselves ahead of competitors, establishing a stronger foothold in the market.
- Improved Sales: By understanding the target market’s needs and aligning the offering accordingly, repositioning can lead to increased customer interest, drive sales, and boost revenue.
- Clearer Target Market: Through repositioning, businesses can refine their target market, enabling more focused marketing efforts and improved customer engagement.
When executed thoughtfully, the repositioning process can unlock new growth opportunities, strengthen the competitive position, and drive long-term success.
Repositioning Risks and Pitfalls
While repositioning can offer numerous benefits to a business, it is not without its fair share of risks and pitfalls. Marketers must carefully consider these factors and plan their repositioning strategies accordingly.
- Insufficient Research: Conducting thorough marketing research is crucial before embarking on a repositioning journey. Failing to understand the target segment’s preferences, needs, and perceptions can lead to adverse reactions and the potential loss of valuable customers.
- Overreaching: Going too far in the repositioning process can result in a loss of credibility. It is important for marketers to strike a balance between introducing new elements and maintaining key aspects of the original offering to avoid alienating existing customers.
- Underestimating the Basics: While repositioning may involve updating and refreshing the product or service, underestimating the importance of reinforcing the basics can have negative consequences. Marketers must ensure that the core value propositions and key features that attracted customers initially are not compromised.
- Overpromising Benefits: Setting unrealistic expectations and overpromising benefits during the repositioning process can lead to disappointment among consumers. It is essential to manage customer expectations and communicate the value proposition honestly and transparently.
- Confusion: Repositioning can create confusion in the minds of customers, especially when there is a significant disparity between the old and new positioning. Marketers must ensure that the transition is communicated clearly, avoiding any ambiguity or uncertainty.
To understand the potential risks and pitfalls better, let’s take a look at the example of United Airlines’ unsuccessful “Rising” campaign.
“Rising” was launched by United Airlines with the aim of repositioning the brand as a symbol of progress and upward mobility. However, the campaign failed to resonate with customers and faced significant backlash. Despite the company’s intention to reposition itself positively, the campaign evoked negative emotions due to a mismatch between the intended perception and the reality of customer experiences. This example highlights the importance of avoiding common pitfalls and learning from previous failures to ensure successful repositioning efforts.”
| Repositioning Risks | Pitfalls |
|---|---|
| Insufficient research | Overreaching |
| Underestimating the basics | Overpromising benefits |
| Confusion |
Repositioning Success
Despite the risks involved, successful repositioning can yield significant benefits for companies and organizations. A notable case study showcasing this success is the American Red Cross. During the Great Recession, the American Red Cross faced financial challenges and decided to reposition itself in the minds of potential donors.
“By clarifying its competitive advantage and creating a sense of urgency around giving, the American Red Cross was able to increase donations during the holiday season.”
This strategic repositioning effort allowed the organization to effectively communicate its mission and the impact of donations, leading to improved engagement from donors. By showcasing its ability to respond to emergencies, the American Red Cross created a stronger competitive position in the nonprofit sector.
Through targeted messaging and a clear call-to-action, the American Red Cross successfully tapped into the generosity of individuals during a challenging economic period. This case study exemplifies the potential benefits of repositioning, including increased donations, enhanced brand perception, and a more substantial market share in the nonprofit space.
Successful repositioning efforts like that of the American Red Cross demonstrate the power of strategic decision-making, effective messaging, and a deep understanding of target audiences. By leveraging repositioning as a strategic tool, companies and organizations can adapt to changing market dynamics, maintain a competitive edge, and achieve long-term success.
What is Product Repositioning?
Product repositioning involves taking a well-known product and rebranding it to compete with current competitors or surpass them. It can include changes to the flavor, packaging, ingredients, form factor, or even a complete redesign of the product. Repositioning allows companies to create new value for their products, expand into new markets, and improve customer loyalty. By making the product better, more effective, or different from its current version, companies can attract new customers and increase sales.
Repositioning a product involves a strategic and deliberate effort to redefine its position in the market. It goes beyond mere cosmetic changes and aims to create a significant impact on how consumers perceive and interact with the product. The objective is to position the product in a way that differentiates it from competitors, satisfies consumer needs more effectively, and captures a larger market share.
Benefits of Product Repositioning
Product repositioning offers numerous benefits to companies willing to undertake this strategic initiative. Some key advantages of product repositioning include:
- Competitive Advantage: By repositioning their product, companies can gain a competitive edge over their rivals. A well-executed repositioning strategy allows a product to stand out among the competition, offering unique value propositions that attract and retain customers.
- Increased Sales and Market Share: Repositioning a product can spur increased consumer interest and generate higher sales. Effective repositioning strategies tap into new market segments, expanding the customer base and capturing additional market share.
- Clearer Target Market: Through repositioning, companies can redefine and narrow down their target market. This enables better resource allocation and more focused marketing efforts, leading to improved targeting precision and customer engagement.
- Enhanced Customer Loyalty: Product repositioning allows companies to connect with customers on a deeper level. By meeting their evolving needs and surpassing expectations, companies can build stronger and more loyal customer relationships.
A Case Study on Successful Product Repositioning – Apple
“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo.” – Apple Inc.
Apple, a renowned technology company, is a prime example of successful product repositioning. In the late 1990s, Apple faced declining market share and struggled to compete against Microsoft’s dominance. With the introduction of the iMac in 1998, Apple underwent a significant rebranding and redesign process, positioning itself as an innovative, user-friendly, and aesthetically appealing brand.
The iMac’s colorful and iconic design, coupled with the revolutionary Mac OS X operating system, redefined Apple’s image and attracted a new wave of consumers. Apple’s product repositioning efforts, accompanied by a compelling marketing campaign, turned the company’s fortunes around. Today, Apple enjoys a strong brand reputation, a loyal customer base, and a leading position in the global technology market.
Reasons behind Product Repositioning
Companies choose to reposition their products for several reasons, driven by the need to adapt to changing market dynamics and better meet consumer demands. These reasons include:
- Changing Target Audience: Companies may reposition their products to target a different audience or attract new customers. By understanding the evolving needs and preferences of consumers, companies can adjust their positioning strategies to remain relevant and capture new market segments.
- Numerous Competitors: In highly competitive industries, companies often face numerous competitors that drive down prices and profits. Repositioning allows companies to differentiate their offerings and create a unique selling proposition that sets them apart from their rivals.
- Bad Reputation: A negative reputation can significantly impact a company’s sales and customer loyalty. By repositioning their products, companies can overcome a bad reputation and regain the trust of customers. This involves improving product quality, addressing previous shortcomings, and effectively communicating the positive changes to the target audience.
- Declining Sales: Declining sales can prompt companies to reevaluate their products and revamp their positioning strategies. Repositioning allows companies to identify and address the factors contributing to the decline, whether it’s outdated features, ineffective marketing messages, or changing customer preferences.
These reasons highlight the importance of product repositioning as a strategic tool for companies to stay relevant, meet consumer needs, and maintain a competitive edge.
Example
“The main reason for repositioning our skincare line was the changing target audience. We noticed a shift in consumer preferences towards natural and organic products, so we revamped our formulations to cater to this demand. By leveraging the power of social media and influencer partnerships, we successfully attracted a new set of customers who are passionate about sustainability and conscious beauty.”
– Jane Smith, Marketing Director at XYZ Skincare
Product Repositioning Reasons
| Reason | Explanation |
|---|---|
| Changing Target Audience | Repositioning to reach a different market segment or attract new customers. |
| Numerous Competitors | Addressing competition by differentiating the product offering. |
| Bad Reputation | Overcoming a negative reputation and regaining customer trust. |
| Declining Sales | Addressing declining sales and adapting to changing market conditions. |
Advantages of Product Repositioning
Product repositioning offers several advantages for companies. By repositioning their offerings, companies can achieve a stronger competitive position in the market. This involves improving the brand’s perception relative to competitors, allowing the company to stand out and attract more customers.
Additionally, repositioning can lead to improved sales by creating a more relevant offering for the target market. When a product is effectively repositioned, it meets the needs and desires of its target customers, making it more likely to be purchased. Coupled with effective communication strategies, repositioning efforts can result in increased sales and revenue.
Repositioning also helps clearly define the target market for a product or service. Through market research and analysis, companies can identify the specific demographic, psychographic, or geographic segments that are most likely to be interested in the repositioned offering. This clear target market enables companies to tailor their marketing efforts and messages to resonate with the right customers, increasing the effectiveness of their campaigns.
“Repositioning can also attract media attention, generating buzz and publicity for the company and its product.”
Another advantage of product repositioning is that it allows companies to tap into new markets. By repositioning a product to appeal to a different target audience or entering a new geographic region, companies can expand their customer base and potentially increase their market share.
Furthermore, repositioning efforts can enhance the overall customer experience. Through product improvements or changes, companies can address pain points and deliver greater value to their customers. This not only helps retain existing customers but also attracts new ones who are seeking a better solution.
Lastly, repositioning can attract media attention, generating buzz and publicity for the company and its product. This increased visibility can further strengthen the brand’s competitive position and lead to additional sales and growth opportunities.
Overall, product repositioning offers a range of advantages, including a stronger competitive position, improved sales, clearer target market, access to new markets, enhanced customer experience, and increased media attention.
Conclusion
Repositioning products or services is a strategic move that allows marketers to adapt to market changes and meet consumer demands effectively. By understanding the reasons behind product repositioning and implementing successful strategies, companies can achieve a stronger competitive position, improve sales, and enhance customer satisfaction.
Continuous market analysis, research, and monitoring of the product’s position are crucial to ensure successful repositioning efforts and maintain market responsiveness. By staying up-to-date with market trends and consumer preferences, companies can identify opportunities for repositioning and make informed decisions to stay ahead of the competition.
Ultimately, the success of repositioning efforts relies on careful planning and execution. Marketers must develop comprehensive strategies that address the specific challenges and opportunities of their industry. By leveraging market insights, optimizing product features and benefits, and effectively communicating the repositioning message, companies can successfully reposition their offerings and thrive in today’s dynamic business environment.
FAQ
Why do marketers reposition their products and services?
Marketers reposition their products and services to stay competitive, meet changing consumer needs, and target new market segments. Repositioning allows them to improve demand, capture new customers, and maintain a competitive advantage.
What is the process of repositioning?
The process of repositioning involves evaluating the current position of a product or service, determining how to alter its positioning and market perceptions for improved competitiveness, and monitoring its effectiveness over time. It may involve changes to the product, price, or promotional message.
What are the risks and pitfalls of repositioning?
Risks and pitfalls of repositioning include adverse reactions from the target segment due to insufficient research, loss of credibility from going too far in repositioning, negative consequences from underestimating basic reinforcement, and confusion between old and new positioning.
Can you provide an example of successful repositioning?
The American Red Cross successfully repositioned itself during the Great Recession by clarifying its competitive advantage and creating a sense of urgency around giving. This led to increased donations, a stronger competitive position, improved sales, and increased market share.
What is product repositioning?
Product repositioning involves rebranding or redesigning a well-known product to compete with current competitors or surpass them. It can include changes to flavor, packaging, ingredients, form factor, or a complete redesign of the product.
Why do companies choose to reposition their products?
Companies may choose to reposition their products to reach a different target audience, address competition and declining profits, overcome a bad reputation, or align with changes in their strategic plan. It ensures they stay relevant and meet consumer needs.
What are the advantages of product repositioning?
Product repositioning offers several advantages, including achieving a stronger competitive position, improving sales by creating a more relevant offering, aligning the product with current market needs, attracting media attention, tapping into new markets, increasing market share, and enhancing the overall customer experience.
How can marketers ensure successful repositioning?
Marketers can ensure successful repositioning by conducting continuous market analysis, research, and monitoring of their product’s position. They should develop effective strategies, stay responsive to market changes, and prioritize customer satisfaction.